Vermont Gov. Douglas: Cut school, health care spending, no new taxes

Vermont Gov. Douglas: Cut budget, no new taxes

MONTPELIER, Vt. — Vermont Gov. Jim Douglas on Tuesday laid out an austere budget for the next fiscal year, saying the state must close a $150 million money gap by taking such steps as: more than quadrupling deductibles paid by some public health care beneficiaries; trimming payments to human services providers; reducing subsidies to help middle-income Vermonters pay school property taxes.

“We must work diligently to ensure Vermonters have access to essential state services, while resisting new taxes that will aggravate future budget challenges,” Douglas said in a letter accompanying his budget message to the Legislature. “And we must make smart investments in job creation, technology and higher education, so we can help Vermonters get back to work —strengthening our economy and growing our tax base.”

The governor proposed a general fund budget of about $1.1 billion; when all other state funding is added in, including federal money the state passes through for human services, transportation and other programs, Vermont will see about $4.7 billion in spending in fiscal 2011.

Douglas said the state budget has been getting squeezed from two directions: The economic downturn has prompted a nearly 20 percent drop in revenues flowing to the state’s general fund since 2007; meanwhile, costs are growing for corrections and other human services, teacher and state employee retirement benefits and aid to property taxpayers.

Key lawmakers said they have not had time to absorb the governor’s proposal and could not respond in detail.

Sen. Susan Bartlett, D-Lamoille, a candidate to replace the retiring Douglas and chairwoman of the Senate Appropriations Committee, said the governor’s proposal appeared to be “a good-faith effort.”

“There are Legislatures all over the country getting these sorts of budgets” from their governors, Bartlett said. “This is just the first step in the budget process.”

“It’s an austere budget that matches the austere times,” said Sen. Vincent Illuzzi, R-Essex-Orleans, chairman of the Senate Economic Development Committee.

The Republican governor repeatedly has called tax increases anathema, and has said the state’s budget gap must be closed mainly with cuts.

That stance, and recent supportive comments about it from leaders of the Democrat-controlled Legislature, angered Tim Searles, director of the Champlain Valley Office of Economic Oppoortunity, an antipoverty agency.

“Why is it always cuts to the most vulnerable Vermonters?” Searles asked. “Why are revenues (tax increases) never among the options considered any more?”

Douglas did propose increases in some budget areas, saying they were needed to position the state better to attract new jobs as the economy rebounds.

He proposed a 7 percent increase, to about $85 million, in state funding for the University of Vermont, state colleges and the Vermont Student Assistance Corp., which provides financial aid for students.

He asked for $8 million in new money for information technology, saying he wants to streamline the state’s computer systems and set up a new Web portal, “myvermont.gov,” through which citizens could interact with state agencies.

And he wants to couple $3 million from the general fund with $5 million in money raised through issuing bonds to pursue his “e-state initiative,” with the goal of getting high-speed Internet and cell phone service to every corner of Vermont.

On transportation, the governor said he would boost funding by $14 million, to a bit over $400 million, with an emphasis on paving Vermont’s weather-beaten roads, including 90 miles of interstate highways this year. Bridges also will be a focus, with $28 million as a down payment on replacing the Champlain Bridge, which was declared unsafe in October and blown up last month.